East Africa is the future of African gas production, reveals a report by Ernst & Young

In the last five years, energy firms including Italy’s ENI and US group Anadarko Petroleum have reported several large-scale offshore gas finds in northern Mozambique’s Rovuma basin and Mamba fields. Recoverable gas reserves in Rovuma is estimated at three trillion cubic meters, said the report.

In Tanzania, BG Group, Ophir Energy, Statoil and ExxonMobil have all found “major gas deposits.”

The report reveals that outstanding and dynamic developments in recent times in the African natural gas sector, have been witnessed in East Africa, even though most of the major players come from further north.

East Africa has therefore come to be described as the “next epicentre” for global natural gas. The report also reveals that it expects the future of African gas to shift eastward, following the huge recent discoveries in offshore East Africa (in particular, Mozambique and Tanzania).Gas production in Africa since 2000 has been growing by about four percent per year, with exports destined for the Asian market. “African gas production reached about 203 bcm (billion cubic metres) in 2011, with production led by Algeria, Egypt and Nigeria, collectively accounting for more than 88 percent of the continent’s total,” said the report.

According to consultants Wood Mackenzie, the ease of access to Asian markets and a break-even point that is substantially lower than rival Australia could help natural gas exports.

The report also noted untapped shale gas resources in South Africa which have been the subject of a controversial debate.